Free and clear
A title search is the process in which a title company or attorney examines public records and other documentation about a property to ensure it is able to be sold and its title is free of any claims, liens or other issues that could jeopardize your ability to legally own the property. (Dreamstime/TNS)
TNS
MOSES LAKE — The home buying process can be a long and involved one, especially for first-time buyers: finding the right home, threading the mortgage maze, negotiating the down payment and the closing costs. In all that hoopla, the title search can sound like a very minor step, but in fact it’s vital.
“Title and escrow companies ensure free and clear title for the buyer,” said Ticor Title Branch Manager Steve Martinez. “We do title searches, we do lien searches, we make sure that there's nothing attached to the property when the new buyer comes into possession. That’s it in a nutshell.”
“A title company does a lot of things in the background,” said Tara Zerbo, a broker at Better Homes and Gardens Real Estate Gary Mann Realty. “They basically play coordinator between us and the lender and the buyer and the seller.”
A title company examines the chain of title, which is made up of the ownership documents for everyone who has ever owned the property, to make sure that the seller actually owns the property themselves, according to the financial website Bankrate.com.
“There’s a lot of fraud, with people trying to sell land that doesn’t belong to them,” Martinez said. “So, we become the private investigators.”
Outright fraud isn’t the only thing the title company has to watch for. A previous owner could have died leaving an heir with a claim to the property the heir might not even know about, or there could be unpaid taxes or a second mortgage on the property, or a creditor may have put a lien on it for an unpaid bill. If the owner has back child support they haven’t paid, the state they owe it in can file a lien against the property until it’s paid up, according to the Washington Department of Social and Health Services.
Any defect in the title means that the property cannot legally be sold until it’s remedied. That’s where the title company comes in, poring through every public record and every document connected with a piece of land before any real estate transaction can take place.
“It can take hours and hours of work, depending on what is attached to the property,” Martinez said. “There is all kinds of stuff; anybody can attach anything to a property. We have to make sure there’s nothing that could hinder the new buyers.”
Sometimes the property owner isn’t aware of the defect, Martinez said, when there’s a lien or a judgment against the property.
“They were probably notified (by a collection agency), but after so many tries, whoever the collector is will just file a lien against the property,” he said. “When we do the title search and it said you owe Billy the Electrician $6,000 for the work that was done on the home, (the owners) think that just goes away. It doesn’t go away. That needs to be paid before they can complete the transaction.”